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(Update: This story has been updated to include Monday’s closing share price, and a description of preliminary Phase II re-treatment results.)

Trubion Pharmaceuticals shares shot up 43 percent this morning, saw all the gains vanish within an hour, then finished the day up 12 percent after reporting encouraging news from a clinical trial of its lead drug candidate, TRU-015. The Seattle biotech company said that rheumatoid arthritis patients who took repeat doses of its drug got relief from the signs and symptoms of the painful joint disease without any increase in serious side effects.

Trubion climbed 69 cents to $2.29 at 9:41 am Eastern time on the news, then gave it all back, falling 13 cents to $1.39 by 10:21 am. The stock finished the day up 12 percent to $1.79. The volatile trading happened after Trubion presented results from a small clinical trial at American College of Rheumatology meeting in San Francisco. In the study, 18 of 38 patients who entered the re-treatment portion of the trial got at least three more shots of a low and high dose of TRU-015, which is being co-developed with Madison, NJ-based Wyeth (NYSE: WYE). After almost six months, half of those patients had at least a 20 percent reduction in their disease symptoms, while another 17 percent saw their symptoms diminish by half, and 11 percent did even better, seeing a 70 percent improvement, researchers said. Re-treatments didn’t appear to cause any increase in adverse events, the company said.

A second study, which wasn’t ready in time to be included at the meeting, showed that Trubion’s drug appeared to work better against the disease when patients were re-treated. In a follow-up analysis of 240 patients from a 276-patient Phase II study, about 40 percent of patients had their signs and symptoms of arthritis improve by half when re-treated with an 800-milligram dose. That compares with 26 percent who did that well over six months in the first part of the study on the same dose, Trubion has said.

Still, these results aren’t really enough to reverse a slide Trubion has gone through this year, in which it has lost 80 percent of its market value. Bigger news came out at last year’s American College of Rheumatology meeting, in which a 276-patient, placebo-controlled trial showed its drug was about as good as rituximab (Rituxan) was in other studies at reducing the signs and symptoms of rheumatoid arthritis. The problem is that investors were hoping for more. Trubion’s product has been designed by its scientists to have the same targeting capability of rituximab against cells with a marker called CD20. But because the Trubion drug is a smaller molecule than rituximab, it is supposed to be better at penetrating deep into tissues like bone marrow and lymph nodes, where it can stop overactive immune-system B cells from causing damage.

As we noted in a profile back in August, Trubion doesn’t have any major news events on the near horizon, and it has a thin volume of shares that trade each day, so maybe it shouldn’t be a surprise to see such wild swings in one day. Trubion struck an optimistic tone in its statement from the medical meeting, but with a stock this low, it’s not going to be easy to get the capital it needs to take this drug all the way to the marketplace.